ACIT CC 39, MUMBAI V. HAKMANS FINANCIAL SERVICES & SECURITIES P.LTD, MUMBAI

ITA 3035/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3042 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 02-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained investment; Principle of natural justice; Condonation of delay
• Section: 143(3); 147; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUM BAI BEFORE SHRI R.C. SHARMA, AM AND SHRI SANDEEP GOSAIN , JM ./ I.T.A. NO. 4364/MUM/2014 ( / ASSESSMENT YEAR: 2007-08) HAKMANS FINANCIAL SERVICES & SECURITIES P. LTD., 304 CAS HOUSE 297/299 DR C.H. STREET NEAR MARINE LINES CHURCH, MUMBAI / VS. DCIT CENTRAL CIR-39, AAYKAR BHAWAN, MUMBAI. ./ ./PAN/GIR NO. AAACH 1513N ( /APPELLANT ) : ( / RESPONDENT ) ./ I.T.A. NO. 3035/MUM/2014 ( / ASSESSMENT YEAR: 2007-08) ACIT CENTRAL CIR-39, AAYKAR BHAWAN, MUMBAI. / VS. HAKMANS FINANCIAL SERVICES & SECURITIES P. LTD., 304 CAS HOUSE 297/299 DR C.H. STREET NEAR MARINE LINES CHURCH, MUMBAI ./ ./PAN/GIR NO. AAACH 1513N ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI NARESH KUMAR / RESPONDENT BY : SHRI ABHISHEK SHARMA / DATE OF HEARING : 27/07/2016 !'# / DATE OF PRONOUNCEMENT : 21/09/2016 $% / O R D E R 2 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. PER SANDEEP GOSAIN, J. M.: BOTH THE PRESENT APPEALS HAVE BEEN FILED BY THE ASS ESSEE AS WELL AS BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-41, MUMBAI DATED 28.01.2014 FOR A.Y. 2007-08 ON THE GRO UNDS OF APPEAL MENTIONED HEREINBELOW. GROUNDS OF ITA NO.3035/M/2014 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ) (HEREINAFTER REFERRED AS 'CIT (A)') HAS ERRED IN CONFIRMING THE ORDER OF LEA RNED ASSESSING OFFICER (HEREINAFTER REFERRED AS' A.O.') OF MAKING ADDITION OF AMOUNT INVESTED IN MILLENNIUM CLOTHING PVT. LTD. OF RS.50,00,000/- MADE ON PROTEC TIVE BASIS WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, S UCH ADDITION SHOULD BE DELETED. 2. THE HON'BLE CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF A.O. OF REOPENING OF THE ASSESSMENT EVEN AFTER THE SAID ASSESSMENT WA S COMPLETED U/S 143 (3) OF THE INCOME TAX ACT, 1961 AND PASSING OF THE REASSESSMEN T ORDER WITHOUT JUSTIFICATION AND AGAINST THE BASIC PRINCIPLES OF NATURAL JUSTICE. AC CORDINGLY, THE NECESSARY DIRECTION SHOULD BE GIVEN IN THIS REGARD. 3. THE HON'BLE CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF A.O. OF MAKING ADDITION OF RS.2,50,000/- ADDED ON SUBSTANTIVE BASI S BEING 5% OF CASH INCENTIVE ON PROTECTIVE ADDITION OF RS. 50,00,000/- AS REFERRED IN GROUND NO. 1 HEREINABOVE WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, SUCH ADDITION SHOULD BE DELETED. GROUNDS OF ITA NO.4364/M/2014 '1. WHETHER, ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A), ERRED IN HOLDING THAT THE SUBSTANTIVE ADDITION UNDE R SECTION 69 OF THE. INCOME- TAX ACT, 1961 ON THE INVESTMENTS MADE BY THE ASSESSEE I N THE SHARES OF FFL (RS.40,00,000/-) AND MBIPL (RS.15,00,000/-) AS GENU INE INVESTMENTS/ TRANSACTIONS.' II. WHETHER, ON FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ID. CIT(A), ERRED IN IGNORING THE FACT THE BANKING TRANSACTIONS HAVE CONCLUSIVELY PROVED THAT THE TRANSACTIONS WERE NON GENUINE AND BOGUS AND THE SAI D INVESTMENTS WERE UNEXPLAINED INVESTMENT OF THE ASSESSEE. III. WHETHER, ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A), ERRED IN DELETING THE CASH INCENTIVE OF RS.2,75,000 /- I.E. COMMISSION @ 5%.' 3 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN ON 16.11.2007 DECLARING AN INCOME OF RS.12,980/-. A NOTICE U/S.14 3(2) DATED 25 TH OF SEPTEMBER, 2008 WAS ISSUED AND SCRUTINY ASSESSMENT WAS COMPLETED ACCEPTING THE RETURNED INCOME OF RS.12,980/-. SUBSEQUENTLY, A NOTICE U/S.148 DATED 29 TH MARCH, 2012 WAS ISSUED AND SERVED ON THE ASSESSEE. RE-OPENING ASSESSMENT ORDER U/S.147 R.W.S. 143(3) OF THE INCOME TAX ACT W AS PASSED BY THE AO ON 05.02.2013 AT ASSESSED INCOME OF RS.1,10,37,980/- A FTER MAKING CERTAIN ADDITIONS. 3. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFE RRED AN APPEAL BEFORE CIT(A). HOWEVER, THE CIT(A) AFTER CONSIDERING THE C ASE OF BOTH THE PARTIES PARTLY ALLOWED THE APPEAL. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE A S WELL AS REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 5. FIRST OF ALL WE TAKE UP APPEAL FILED BY THE ASSE SSEE ON THE GROUNDS MENTIONED BELOW. GROUNDS OF ITA NO.3035/M/2014 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ) (HEREINAFTER REFERRED AS 4 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. 'CIT (A)') HAS ERRED IN CONFIRMING THE ORDER OF LEA RNED ASSESSING OFFICER (HEREINAFTER REFERRED AS' A.O.') OF MAKING ADDITION OF AMOUNT INVESTED IN MILLENNIUM CLOTHING PVT. LTD. OF RS.50,00,000/- MADE ON PROTEC TIVE BASIS WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, S UCH ADDITION SHOULD BE DELETED. 2. THE HON'BLE CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF A.O. OF REOPENING OF THE ASSESSMENT EVEN AFTER THE SAID ASSESSMENT WA S COMPLETED U/S 143 (3) OF THE INCOME TAX ACT, 1961 AND PASSING OF THE REASSESSMEN T ORDER WITHOUT JUSTIFICATION AND AGAINST THE BASIC PRINCIPLES OF NATURAL JUSTICE. AC CORDINGLY, THE NECESSARY DIRECTION SHOULD BE GIVEN IN THIS REGARD. 3. THE HON'BLE CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF A.O. OF MAKING ADDITION OF RS.2,50,000/- ADDED ON SUBSTANTIVE BASI S BEING 5% OF CASH INCENTIVE ON PROTECTIVE ADDITION OF RS. 50,00,000/- AS REFERRED IN GROUND NO. 1 HEREINABOVE WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, SUCH ADDITION SHOULD BE DELETED. 6. AT THE OUTSET, LEARNED AR HAS DRAWN OUR ATTENTIO N TO THE APPLICATION FOR SEEKING CONDONATION OF DELAY IN FILING APPEAL BEFOR E THE TRIBUNAL. IN THIS REGARD, IT IS SUBMITTED BY LEARNED AR THAT THE APPE AL COULD NOT BE FILED WITHIN THE PRESCRIBED PERIOD OF 60 DAYS FROM THE DATE OF S ERVICE OF NOTICE AS THERE WAS CHANGE OF ADDRESS AND THE ORDER OF THE CIT(A) WAS M ISPLACED IN THE ABSENCE OF PROPER STAFF. IT IS FURTHER SUBMITTED THAT BECAUSE OF NON AVAILABILITY AND MISPLACEMENT OF ORDER, THE APPEAL COULD NOT BE FILE D WITHIN LIMITATION AND HENCE THERE OCCURRED A DELAY IN FILING THE APPEAL. LEARNED AR ALSO DRAWN OUR ATTENTION TO THE AFFIDAVIT FILED BY SHRI M. K. MALP ANI WHO CLAIMS TO BE THE DIRECTOR OF ASSESSEE-COMPANY IN WHICH THE CONTENTIO NS CONTAINED IN THE APPLICATION ARE REITERATED. 5 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. 7. WE HEARD THE COUNSEL FOR BOTH THE PARTIES ON THI S APPLICATION AND CONSIDERING THE ARGUMENTS AS WELL AS CONTENTIONS CO NTAINED IN THE APPLICATION AS WELL AS SUPPORTIVE AFFIDAVIT. WE ARE OF THE VIEW TH AT RIGHTS OF THE ASSESSEE WOULD BE PREJUDICE IN CASE ASSESSEE IS NOT PROVIDED AN OPPORTUNITY TO CONTEST ITS CASE ON MERITS. WE FOUND SUPPORT FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF MST. KITJI VS. LAND ACQUISITIO N COLLECTOR, AIR 1987 SC 1353, WHEREIN IT HAS BEEN HELD THAT THE COURTS SHOU LD ADOPT A LIBERAL APPROACH WHERE THE DELAY IS OF FEW DAYS AND IN CONSTRUING TH E EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCE SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE HENCE THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE LIB ERAL CONSTRUCTION, THEREFORE, FOLLOWING THE JUDGMENT OF HONBLE SUPREME COURT, WE ALLOW THE APPLICATION FILED BY THE ASSESSEE FOR SEEKING CONDONATION OF DE LAY AND ADMIT THE APPEAL TO BE DECIDE ON MERITS. DURING THE PENDENCY OF THE PRE SENT APPEAL, THE ASSESSEE HAS ALSO MOVED ANOTHER APPLICATION FOR RAISING ADDI TION GROUND OF APPEAL. 8. WE HEARD THE COUNSEL FOR BOTH THE PARTIES AND WE HAVE PERUSED THE CONTENTS OF THE APPLICATION FOR SEEKING PERMISSION TO TAKE ADDITIONAL GROUND OF APPEAL AND WE ARE OF THE CONSIDERED VIEW THAT THE A DDITIONAL GROUNDS WHICH THE ASSESSEE NOW WANTS TO RAISE BEFORE US IS SQUARELY O F LEGAL IN NATURE AND THE SAID LEGAL GROUNDS GOES TO THE ROOTS OF THE CASE AND EVE N OTHERWISE IT IS A SETTLED LAW 6 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. THAT LEGAL PLEAS/GROUNDS CAN BE RAISED AT ANY STAGE OF HEARING. WE FOUND SUPPORT FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE C ASE OF NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT (1998) 229 ITR 383 ( SC). CONSIDERING THE FACTS OF THE CASE AS WELL AS THE RATIO LAID DOWN BY HONBLE SUPREME COURT, WE ALLOW THE APPLICATION FILED BY ASSESSEE FOR SEEKING TO TAKE ADDITIONAL GROUND OF APPEAL. 9. SINCE THE ADDITIONAL GROUND RAISED BY THE ASSESS EE GOES TO THE ROOTS OF THE CASE AND THE JURISDICTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISION OF SECTION 147 OF THE INCOME TAX ACT HAS BEEN CHALLENG ED, THEREFORE, IN OUR CONSIDERED VIEW THIS ADDITIONAL GROUND NEEDS TO BE ADJUDICATED FIRSTLY. GROUND NO.4:- THE ASSESSMENT ORDER PASSED BY THE LD . AO IS NOT LEGALLY SUSTAINABLE AS THE LD. AO DID NOT SUPPLY THE APPELL ANT WITH REASONS FOR REOPENING THE ASSESSMENT U/S.147 AS MANDATED BY THE HONBLE SUPRE ME COURT IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD. VS. INCOME TAX OFFICER & OR S 259 ITR 0019 (SC). GROUND NO.5:- THE ASSESSMENT ORDER PASSED BY THE LD . AO IS NOT LEGALLY SUSTAINABLE AS THE LD. AO DID NOT FOLLOW THE PROCEDURE FOR COMP LETING THE ASSESSMENT U/S.147 AS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF ASIAN PAINTS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX & ANR ITR 0090 (B OM). 10. GROUNDS NO.4 AND 5 RAISED BY THE ASSESSEE BEFORE US ARE INTERRELATED AND INTERCONNECTED; THEREFORE, WE THINK IT FIT TO DECID E THE SAME BY PASSING A COMMON ORDER. 7 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. 11. LEARNED AR APPEARING ON BEHALF OF THE ASSESSEE ARGUED THAT THE ASSESSMENT ORDER PASSED BY AO U/S.147 R.W.S. 143(3) OF THE INCOME TAX ACT IS NOT LEGALLY SUSTAINABLE AS THE AO DID NOT SUPPLY TH E ASSESSEE FOR THE REASONS FOR RE-OPENING THE ASSESSMENT U/S.147 AS MANDATE BY THE HONBLE SUPREME COURT IN THE CASE OF M/S. GKN DRIVESHAFT (INDIA) LTD. V/S. I TO AND ORS, 259 ITR 19 (SC). LEARNED AR FURTHER SUBMITTED THAT ASSESSEE VI DE LETTER DATED 26.11.2012 REQUESTED THE AO FOR PROVIDING THE REASON FOR REOPE NING THE ASSESSMENT. IT WAS ALSO SUBMITTED THAT THE REASONS RECORDED BY THE AO WERE PROVIDED TO THE ASSESSEE VIDE AOS LETTER DATED 5.2.2013 ALONG WITH THE ASSESSMENT ORDER WHICH WAS ALSO PASSED ON THE SAME DATE. THEREFORE, IT IS SUBMITTED BY THE AR THAT THE AO HAS FURNISHED THE REASONS MERELY AS A FORMALITY AND TAKEN THE ISSUE VERY CASUALLY WITHOUT FOLLOWING THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIFE SHAFTS INDIA LTD. V/S. ITO (SUPRA). 12. ON THE OTHER HAND, LEARNED DR APPEARING ON BEHA LF OF THE REVENUE RELIED UPON THE ORDER PASSED BY THE LOWER AUTHORITIES. 13. WE HAVE PERUSED THE RECORD AS WELL AS THE ORDER PASSED BY THE REVENUE AUTHORITIES. WE HAVE NOTICED THAT SINCE THE NOTICE U/S.148 WAS ISSUED IN THE CASE OF THE ASSESEE WITHIN THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT 8 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. ASSESSMENT YEAR, THEREFORE, WHAT ALL IS REQUIRED TO BE SEEN IS WHETHER THE AO HAD REASONS TO BELIEVE THAT INCOME CHARGEABLE TO T AX HAS ESCAPED ASSESSMENT OR NOT. LEARNED CIT(A) HAS ALSO DEALT WITH THE ISS UE IN PARAGRAPH 5.3.2 IN ITS ORDER WHICH IS REPRODUCED BELOW: 5.3.2 AS REGARDS THE PLEA OF NON-COMMUNICATION OF REASONS FOR RE-OPENING THE ASSESSMENT, IT IS SEEN FROM PERUSAL OF THE CASE REC ORDS THAT THE APPELLANT HAS PLACED ON RECORD COPY OF ITS LETTER DATED 19.12.201 2 ADDRESSED TO THE A.O. AND FILED IN 'TAPAL' ON 17.12.2012 WHEREIN IT IS CLEARLY STAT ED IN PARA 2 THAT 'WE SUBMIT THAT NOW WE HAVE FURNISHED THE REPLY (TO NOTICE U/S .148) BY LETTER FILED ON 26.11.2012. IN PARA 2 OF OUR LETTER FILED ON 26.11. 2012, WE HAVE GIVEN OUR OBJECTIONS FOR REOPENING OF ASSESSMENT U/S.148 WHIC H MAY KINDLY BE CONSIDERED'. IT IS FURTHER OBSERVED FROM THE RECORD THAT THE OBJ ECTIONS RAISED BY THE APPELLANT VIDE LETTERS DATED 26.11.2012 AND 19.12.2012 WERE D ISPOSED OF BY THE A.O. VIDE LETTER DATED 05.02.2013. THUS, IT TRANSPIRES FROM THE RECO RD THAT THE APPELLANT WAS NOT ONLY AWARE OF THE REASONS RECORDED BY THE A.O. FOR REOPENING THE ASSESSMENT BUT HAD ALSO AVAILED OF OPPORTUNITY TO FILE OBJECTI ONS TO ISSUANCE OF NOTICE U/S.148. IT IS ALSO SEEN THAT THE A.O. HAD DULY DISPOSED OF THE OBJECTIONS BY PASSING A SPEAKING ORDER BEFORE PASSING THE IMPUGNED ASSESSME NT ORDER. PRESUMING (FOR THE SAKE OF ARGUMENT ONLY) THAT THE REASONS WERE NOT FO RMALLY COMMUNICATED TO THE APPELLANT, THIS WOULD NOT INVALIDATE THE REASSESSME NT PROCEEDINGS, AS HELD IN THE CASE OF ITO V. SMT. GURINDER KAUR 102 ITD 189 (DEL). IN THAT CASE, IT H AS BEEN HELD THAT THERE IS NO REQUIREMENT THAT THE A.O . HAS TO FORMALLY COMMUNICATE THE REASONS FOR REOPENING THE ASSESSMENT TO THE ASS ESSEE AND, THEREFORE, REASSESSMENT CANNOT BE INVALIDATED ON THE GROUND TH AT THE REASONS FOR REOPENING THE ASSESSMENT WERE NOT DISCLOSED TO THE ASSESSEE. WHILE COMING TO THIS CONCLUSION, THE HON'BLE TRIBUNAL RELIED ON THE JUDICIAL PRONOUN CEMENTS/PRECEDENTS REPORTED IN 63 ITR 219 (SC) AND 25 ITR 447 (MAD.). 14. AFTER CONSIDERING THE DETAILED ORDER PASSED BY CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE WAS NOT ONLY AWAR E OF THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT BUT HAD ALSO AVAILED OF THE OPPORTUNITY TO FILE OBJECTIONS TO THE ISSUANCE OF NOTICE U/S.14 8, THEREFORE, IT CANNOT BE PRESUMED THAT THE REASONS RECORDED BY THE AO WERE N OT IN THE KNOWLEDGE OF THE 9 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. ASSESSEE. THEREFORE, CONSIDERING THE JUDGMENTS RELI ED UPON BY THE ASSESSEE AS WELL MENTIONED IN THE ORDERS PASSED BY CIT, WE DISM ISS THIS GROUND OF APPEAL RAISED BY THE ASSESSEE. 15. LEARNED AR FURTHER SUBMITTED THAT THE ASSESSMEN T ORDER PASSED BY AO IS NOT LEGALLY SUSTAINABLE AS THE AO DID NOT FOLLOW TH E PROCEDURE FOR COMPLETING THE ASSESSMENT U/S.147 AS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. VS. DCIT, (2008) 296 ITR 90 (BOMBAY). IN THIS CONTEXT, LEARNED AR ALSO RELIED UPON THE ABOVE MENT IONED DETAILED JUDGMENT OF HONBLE BOMBAY HIGH COURT. 16. ON THE OTHER HAND, LEARNED DR APPEARING ON BEHA LF OF THE REVENUE RELIED UPON THE ORDER PASSED BY THE LOWER AUTHORITIES. 17. WE HAVE HEARD THE COUNSEL FOR BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AS WELL AS ORDER PASSED BY REVE NUE AUTHORITIES. 18. AFTER PERUSAL OF THE ASSESSMENT ORDER PASSED U/ S.147 R.W.S. 143(3) OF THE INCOME TAX ACT, IT IS CLEARLY MENTION THAT IN PARAG RAPH 2.1 OF THE SAID ASSESSMENT ORDER THAT THE REASONS FOR REOPENING WAS PROVIDED TO THE ASSESSEE 10 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. VIDE ORDER DATED 5.2.2013 BY THE AO AND THE OBJECTI ONS TO THE REOPENING WAS ALSO REJECTED BY THE SAME ORDER AND THE SAME WAS SE NT BY SPEED POST TO THE ADDRESS GIVEN IN THE RETURN ON INCOME. MEANING THER EBY THE OBJECTIONS OF THE ASSESSEE AGAINST THE REOPENING WERE REJECTED BY THE AO ON 5.2.2013 ITSELF. IN THE PRESENT CASE, ASSESSMENT ORDER U/S.147 R.W.S. 1 43(3) OF THE INCOME TAX ACT, 1961 WAS ALSO PASSED ON 5.2.2013 BY A CONSOLIDATED ORDER WHICH IS APPARENT FROM PARAGRAPH 12 ON INDEX/FIRST PAGE OF THE ORDER WHICH GOES TO SHOW THAT THE OBJECTIONS RAISED BY ASSESSEE REGARDING REOPENING W ERE REJECTED ON 5.2.2013 AND ON THE SAME DATE ORDER U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 WAS ALSO PASSED WHICH IS A CLEAR VIOLATION OF THE J UDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. VS. DCI T AND OTHERS (SUPRA), WHEREIN IT HAS BEEN CATEGORICALLY MENTIONED THAT I F THE AO DOES NOT ACCEPT THE OBJECTION FILED BY THE ASSESSEE AGAINST REOPENING O F THE ASSESSMENT, HE IS NOT TO PROCEED FURTHER IN THE MATTER FOR THE PERIOD OF FOU R WEEKS FROM THE DATE OF SERVICE OF ORDER REJECTING THE OBJECTIONS ON THE AS SESSEE, ABOVE PROCEDURE IS TO BE FOLLOWED STRICTLY IN ALL STAGE OF REOPENING OF A SSESSMENT. FROM THE ABOVE DIRECTIONS ISSUED BY THE HONBLE BOMBAY HIGH COURT, IT IS CLEAR THAT THE AO WAS TO PROVIDE FOUR WEEKS FROM THE DATE OF SERVICE OF ORDER, REJECTING THE OBJECTIONS ON THE ASSESSEE BEFORE PROCEEDING FURTHE R IN THE MATTER BUT IN THE PRESENT CASE AS PER THE AO, OBJECTIONS WERE REJECTE D ON 5.2.2013 AND 11 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. ASSESSMENT ORDER WAS ALSO PASSED ON 5.2.2013 U/S.14 7 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961, THE AO HAS NOT GIVEN FOUR CLE AR WEEKS HOWEVER THERE IS NO MATERIAL ON RECORD TO PROVE THE SERVICE OF ORDER REJECTING THE OBJECTIONS OF THE ASSESSEE. THE ENTIRE FACTS WHICH EMERGES FROM T HE ORDER OF ASSESSMENT ITSELF GOES TO SHOW THAT THE ASSESSMENT ORDER PASSED U/S.1 47 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 IS IN CLEAR VIOLATION OF THE D IRECTIONS GIVEN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAIN TS LTD. AND OTHERS, THEREFORE, THE SAME IS NOT SUSTAINABLE IN LAW AND I T IS LIABLE TO BE SET ASIDE EVEN OTHERWISE AS PER THE FACTS CONTAINED IN THE PRESENT CASE, THE REOPENING WAS INITIATED ON THE SOLITARY STATEMENT OF SHRI JAGDISH PUROHIT, WHICH WAS RETRACTED LATER ON. APART FROM THAT NO SUBSTANTIAL EVIDENCE H AS BEEN BROUGHT ON RECORD TO CORROBORATE THE INITIAL STATEMENT MADE BY SHRI JAGD ISH PUROHIT. ON THIS ASPECT, OUR ATTENTION WAS DRAWN TO THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SHRADDHABEN MODI, WHEREIN IT WAS HELD THAT IN THE ABSENCE OF ANY INDEPENDENT MATERIA L, NO REOPENING CAN BE INITIATED ON THE STATEMENT (WHICH WAS LATER ON RETR ACTED) OF THE PARTY. FURTHER IT WAS HELD THAT ANY NOTICE OF REOPENING U/S.148 WOULD BE REQUIRED TO BE TESTED BY TOUCH STONE OF REASONS RECORDED BY THE ASSESSING OF FICER. USE OF STATEMENT RECORDED U/S.133A COULD NOT BE PERMITTED WITHOUT AN Y CORROBORATIVE EVIDENCE 12 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. PROCEEDINGS U/S.147 AND NOTICE U/S.148 COULD NOT BE PERMITTED TO BE SUSTAINED REVENUES APPEAL DISMISSED. 19. FROM THE PRINCIPLES LAID DOWN BY THE AFOREMENTI ONED JUDGMENT, IT IS CLEAR THAT NO REOPENING PROCEEDINGS CAN BE INITIATE D ONLY ON THE SOLITARY STATEMENT WITHOUT ANY CORROBORATIVE MATERIAL PLACED ON RECORD AND MOREOVER IN THE PRESENT CASE THE STATEMENT MADE BY JAGDISH PURO HIT HAS ALREADY BEEN RETRACTED, THEREFORE, A RETRACTED STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCE CANNOT BE MADE BASIS FOR REOPENING THE ASSESSMENT. HOWEVER, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS TAKING INTO ACCOUNT THE LEGAL PROPOSITION AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE PROCEEDINGS U/S.147 AND THE NOTICE ISSUED U/S.148 C OULD NOT BE PERMITTED TO BE SUSTAINED. HENCE, THESE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 20. OTHER GROUNDS RAISED BY THE ASSESSEE IN THE PRE SENT CASE BECOME INFRUCTUOUS. THUS, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 21. AS WE HAVE ALREADY ALLOWED THE ASSESSEES APPEA L, THEREFORE, THE APPEAL OF THE REVENUE DOES NOT REQUIRE ANY ADJUDICATION AS HAS BECOME INFRUCTUOUS. HENCE, THE APPEAL OF THE REVENUE IS DISMISSED AS IN FRUCTUOUS. 13 ITA NO. 4364/MUM/2014 & 3035/MUM/2014 (A.Y. 2007-08 ) HAKMANS FINANCIAL SERVICES & SECURITIES PVT. LTD. 21. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOW ED AND THE APPEAL OF THE REVENUE IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2016 SD/- SD/- (R.C. SHARMA) (SANDEEP GOSAIN) $ / ACCOUNTANT MEMBER &' $ / JUDICIAL MEMBER ( ) MUMBAI; *$ DATED : 21.09.2016 P.K.K., SR.P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI